So you want to apply for credit card? That’s great, but are you well versed with the world of credit card? Do you know how does bank evaluate its potential credit card customers? Are you clear about your requirements and why are you so eager to get a credit card?

Most of the people do not spend much time to check which credit card is best for their requirement, but just grab the one that is offered to them for the first time. So today, I want to make sure I give you a sneak 360 view of the world of credit card and what all things one should be looking at before they apply for a credit card in India.

1. Your Income is important parameter for Credit Card Eligibility

When you fill in the application form while applying for a credit card, the lender asks you for various information like your age, city, take home income per month and type of your employment, which all is required to decide if you qualify for getting a credit card or not.

But out of those, your income is a very important parameter because that’s the main thing which determines your repayment capacity of your dues each month.

Someone earning Rs 50,000 per month is generally more eligible than someone who earns Rs 25,000 per month, because higher income is an indication that you will be able to pay your bills on time and on a consistent basis.

You income is also an important information for bank to set your credit limit at the time of issuing the credit card to you. You can see below a snapshot of HSBC credit card page and they have mentioned that the minimum annual income of a person has to be Rs 5,00,000 to apply for these credit cards.

So if you are earning good enough money, only then banks will be interested to give you a credit card. Make sure you do not apply for credit card just for the sake of it without a minimum threshold income. Also, note that you would need to submit your latest ITR copy for income proof.

2. Existing relationship with bank fastens the process

If you already have a salary account or saving account with some bank, it is relatively easier to get a credit card, especially when you have handled your accounts properly, I mean not have too many overdrafts, maintaining your minimum balance over the years and having a consistent flow of money in your account.

This is because the bank can easily verify your income details and see your activity and how responsible you have been over the years.

So for example, if you want a HDFC credit card, but you have salary account in ICICI bank, it would be recommended that you apply for ICICI credit card first (assuming it does not matter much to you). You can easily apply for the card online on bank website, and even bank will ask if you are an existing account holder in the bank or not. To which you can choose YES

If you do not want to apply online for your card, then you can also visit the branch and meet the representative face-to-face. Bankbazaar is a good portal to compare and apply for credit cards or any other kind of loans.

3. Your past credit history matters

It also matters how was your past credit history, if you are looking for credit card. If you have taken some personal loan, education loan or home loan and now applying for credit card (generally a second credit card), your CIBIL report will be checked by the company to find out how was your credit history.

Did you make your payments on time? Did you close all your loans and outstanding without any balance or not?

You can see a snapshot by cibil.com below which shows you what all documents are required by the lender before issuing various kinds of loans and it shows that the latest credit score and CIR is mandatory.

In fact the CIBIL report is now mandatory check for any kind of loan. Make sure you surely check your credit report once before you apply for your card.

4. Be clear about the purpose of credit card

There are various kinds of credit cards available with bank. You need to understand very clearly what is the main reason you want the credit card?

If you want to use the credit card primarily for dining and shopping, then you can choose the card which gives more benefit for that. If your main spending is on fuel, then there are cards which cater to that requirement. There are tons of ways you can get rewards and cash back on credit cards. It’s important to do a bit of research on this.

Below you can see some HDFC cards examples .

Most of the credit card companies offer cards under categories like Silver, Gold, Platinum, and Titanium and then as per categories like Diners card, Fuel Card, Cashback cards. If you look at HDFC credit card page, you can see categories and various kinds of features as below

5. FREE vs. Annual Fee credit card

There are credit cards which are totally FREE for lifetime and then there are cards which come with annual fees ranging from Rs 99 to few thousands per year. Most of the people want a lifetime free credit card, which is totally fine if your credit card usage is basic in nature.

But if you have very heavy card usage and 40-50% of your spending happens on credit card itself, then it makes sense to go for premium credit cards, which have some annual fees, because those cards offer you awesome benefits and various ways to save money.

You get higher reward points and cash back in those cards. Also, they have special tie ups with airlines, hotels, shopping stores, fuel companies etc and you get maximum benefits by being a premium member.

For example: Those who travel a lot by airlines can look at Signature Credit Card from HSBC which has special tie up with Makemytrip and comes with annual fees of Rs.3,500, but gives lots of discounts and vouchers which can be used by the cardholder. You will not get these offers if you have a normal credit card.

If you want to learn how can you use your credit card in more efficient way, a good resource is this article written by Shabbir.

6. You can also get credit card against a fixed Deposit

Do you know that you can also get credit card against fixed deposit open with a bank ? Yes – That’s possible . There are many banks, which will offer you a credit card, if you open a fixed deposit and want a card against it as security (These are also called Instant Credit Card).

This is very much beneficial for those people who are not able to get credit card due to low credit score and banks are rejecting their credit card application. So you can apply for a credit card if you are ready to open a fixed deposit and its also one of the good ways to start improving your credit score, if its messed up.

Most of the banks have a minimum threshold of Rs 20,000 fixed deposit to be opened with them and your credit limit is always below that FD amount.

So if you open a Rs 40,000 FD with bank and take a credit card against that FD, then your card limit might be 20-25k per month and if you default of payments for a long time, bank will break the FD and take their dues from it, so there is no risk for bank.

This is the reason that it’s much faster to get a credit card against a fixed deposit and there is no income proof required to get credit card against a FD .

Get set Ready

I hope you are now clear on various things before you apply for credit card from any bank. It’s very important to be very clear on your expectations from the card and for what purpose why you need it.

I would be happy to know your views on this and if you can give some tips to a beginner who is looking for cards for the first time

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100 replies on this article “6 facts to know before you apply for credit card in India”

Hi,
Great article. I also want to get a credit card but cibil score scares me. This is because I have heard that non payment in credit cards due to any reason also lowers down your cibil score. Is that true?

Thanks Manish. I am constantly reading about cibil score because increasing it is has become immensely important for me. I read many blogs and found https://www.loankuber.com/content/cibil-score/ to be very beneficial. It has a section just dedicated to cibil score. Thought it would help other people like me too. 🙂

Hello
my monthly take home salary is approx 33k i m using HDFC credit card from last six month but it is not beneficiary so i want to make another credit card that is beneficiary for me so suggest me is i m eligible for any bank card 1 more thing 1 month earlier i applied for credit card that was rejected due to previous card is not 6 months older so now i am eligible or not

One instance of non approval does not mean that you have poor CIBIL score.Have you checked your CIBIL score?
If you are paying loan in timely manner with no issues of default. You will most likely have a fair score in CIBIL. Though, The more we apply for loan or loan products it does have an adverse effect on our CIBIL score .Credit card is a debt product and thus has an impact on CIBIL.

In case you have not checked it yet . My suggestion would be to better make a decision based on the need rather then getting scared of CIBIL score.

hello sir first time i am planning to apply credit card….i am eligible in major criterias…actually i havent taken any bank lone during entire life…..as far as itr is concerned what eles i can show as i am paying my taxes…i have retail pharmacy at my place my earning is good requesting kindely help is about my question i desperately need credit card…semd your valueable advice to make it happen..waiting for positive reply
regards
Rohan Patil

dear sir, m buisnessman. i’v wholesale buisness. where m earning 33000 inr as per itr.. And I have a current and saving account in andhra bank. And I want to know in which bank I have to apply…. Recently I also get call from ICICI bank representative. So which is better ICICI or andhra bank. My itr for a. y 15-16 filed on 10th Oct 2015. I want my first credit card with higher limit for future prospects so I m in confusion. I had also taken personal loan and auto loan and making timely payment of all. So which bank can give me higher limit

Hello Sir
I’m 27 and my take-home income is 88k. My savings account is with ICICI and Home Loan account is with SBI. I’m more interested in CITI bank credit cards as I often see their name being appeared in all the offers in e-retailers Advts in newspaper for heavy cashbacks.
ICICI, HDFC etc. appear rarely. Would you please suggest a good credit card if it is not to be CITI only?

Hi Manish ,
After doing a lot of research , I am going with ICICI Platinum chip card. Correct me if I am wrong.

I am planning to apply for ICICI Platinum Chip credit card , but I don’t see it under the offer section of bookmyshow movie tickets. But I heard , it gives good movie offers , please confirm if you can.
And also do provide any suggestions between ICICI Coral credit card and ICICI Platinum chip card.
Highly appreciated.
Looking forward to your reply.

Hai Manish, my takehome comes around 70k per month. My salary will be credited to that account in narketpally(where I work )which is 50 km away from my residing place hyderabad. Many banks are rejecting me application based on this point concluding that the distance should be with in 30 km from residing area.can you please suggest me any bank providing credit card in my situation???

Dear Manish!
I was told that spending more than Rs 2,00,000 in a given tax year on credit card has to be informed to Income tax deptt. Is it so?
If yes, then what is the procedure to be followed? Please enlighten me!

Dear Manish, very informative as usual. But your point #2 violates my Rule #1 🙂 Do not get a Credit card from a bank where you have Savings account and most importantly having Salary Account. This way you avoid being at the receiving end, in case of transaction disputes on Credit Card. Note that, it is perfectly legal for a bank to recover the Credit Card dues from your savings account. So, if your Credit Card is misused and bank doesn’t agree that it was misused (in most cases the banks don’t agree that it was misused, until you really fight for it) , they would recover the money from your Savings account and then you would be fighting on 2 fronts to prove your innocence and to get back your own hard earned money although it’s not your fault. This is much different than Bank fighting to recover the money from you and you trying to prove that it was an unauthorized use of credit card.

I’ve a bad experience with SBI Card’s local processing people in Coimbatore. Me & one of my colleague applied for the card together, (both of us are eligible for platinum card) during first 2 calls from their head office in Chennai and later from SBI came to our respective mobiles,

After that things started to change. I received couple of calls in my office extension asking abt the colleague, which i didn’t mind. Then I started calls in my mobile asking his name and detilas of his home etc. He was no in office for 3/4 days for a function so I didnt bother to call him when he came back he told he he’s getting calls in my name. Then we called up the guy who came for verification and after checking he told the contacts details got mixed up between us and he will correct it. Its been 2/3 weeks now and atlast we received message saying card is rejected.

This is not at all out fault all mess up done from their side. Is there anyway we can get it corrected. I believe if I apply a new card bcos of this rejection that will automatically get cancelled isnt it. Any way to contact someone from SBI on this.

A bit unrelated to the article. When banks ask for ITR proof what document should I submit? I have electronic copies of ITR-V, ITR2 OR ITR-V receipt. If I have to submit one of the electronic copies I have wont they be insisting on attestation by a tax department official to validate it?

From my experience, if anyone has delayed payments with ICICI credit “ever” and closed that card, they may never give a ICICI card again. I had a ICICI card from 2006 to 2008 and had several delayed payments. Eventually I paid full amount due by cheque and closed the card. This was 7-8 years ago when I was young and immature and not serious about financial history etc.

Later on in 2010 we got a car and I took an HDFC car loan of 4lakhs (2010-2015) which I am repaying 100% on time. Took a Bajaj Consumer loan of 32k, (9months – 2013- 2014) repaid full on time and closed.

In January 2015 with a CIBIL of 798 and excellent repayment record of past 6 years, I applied for an entry level ICICI credit card from my ICICI salary account. And this was rejected citing past repayment record of ICICI credit card of 2006. Mind you it was not a “settled” account, I had repaid full amount due of 48k with interest and late penalties in 2006 and then closed it. Even today my CIBIL shows card balance as “-1” (I had paid 1 Rupee extra just to be sure there is no due and I had no intention of settling the account, I just wanted to pay whatever was due and close it).

Was obviously dejected, I then applied for HDFC and SBI card. HDFC approved and provided a platinum card with a limit of 1 Lakh and SBI also approved and sent a card with a limit of 76000.00.

Hence, I am not sure if this was a correct risk assessment from ICICI bank rejecting the application based on 7-8 year old card repayment history especially when it was not even a settled account. Risk assessment teams at other two banks found me credit worthy and issued cards with decent limits. An email from ICICI later provided a workaround with Instant credit card based on FD. I just smiled at the email and deleted it. No more ICICI for me.

sir recently my salary is hiked to 30,000 take home now i want to apply for credit card i already had a HDFC CARD from last 3 months onwards, but limit is 40,000 i want more limit card may be 60,000 to 70,000 what can i do for that and which will more limit card for My salary as now 30,000 sir

I am a foreigner and was living plus working in India for over 18 months with one of the Big 4’s. So income verification was not a problem. Indus Ind bank approached me if I wanted a credit card and after I said “Yes” and completed the required paper work, I went through their telephonic enquiries not once but 5 times;was asked the same questions (in fact recycling of the questions) again and again. The 5th time I was pissed and hung up on Indus Ind bank saying “You either give me the card or decline it” as the same questions were asked time and again.

The next day – they sent me a rejection message and it is a big big joke to apply and get a credit card in India. Overall, the system is too slow and even opening an Indian rupee salary account was an unpleasant experience.

I have a credit card with some outstanding amount due. I am paying only minimum amount due. But now I k now better thanks to your article on interest rates and bank debt trap.

I want to know where can I see the interest amount charged on the total amount due on my credit card? Is the interest charges on late payment of credit card added to the credit card statement itself or will I see it separately at the time of making full payment? The bank in question HDFC.

I have been using HDFC credit card for last 8+ years; my salary account is with HDFC as well for last 10+ years. I have got card upgrade & credit limit enhancement almost every 3 years. Currently, I posses HDFC Superia with a very BIG limit. Also got payment holidays twice recently. My usage is good.

I have never missed due date a single time. Some 35 thousand odd reward points balance today. Sr.4 in your article above says HDFC offers cashback against outstanding, but I don’t think so. When it comes to point redemption, HDFC has the least options available I guess. Once I inquired about JP airmiles as well, but it seemed to be a very complex thing.

Hi Manish,Good day!
Already I am using HDFC Platinum plus card from past 1 year. I want to apply for new card(2nd) which is only shopping/fuel purpose. Please suggest me the best card which gives the max. CASH BACK. Thanks!

Few things coming to my mind (some are obvious I think):
1. Why do you need a credit card in the first place – need a strong answer for yourselves before applying for one.
2. We need to determine cost and benefits. Costs are already available (delay of repayment, annual charges, additonal 2-2.5% in certain outlets are some), but should also think about benefit – do we understand the concept of credit – why would bank lend you money to be repaid in future (some cards offer as high as 50 days from date of payment!)? Will this benefit me by delaying my repayment by, say 30 days, hence gathering additional interest if I hold that money with me (say, in bank savings a/c)?
3. For me, I survived 11 years after I started earning without a credit card (I didn’t have a need for it), and took only 2 years back because my employer will put in some allowances only if I have credit card. This is lifetime free card (HDFC platinum plus). From my experience: we need to constantly keep watching for repayment date, and repay dues 5 days earlier than due date. Anything else is trouble!
4. Report lost/stolen card immediately, and obtain CSR (community service receipt)/FIR from police station if bank insists on it. This definitely will strengthen our case and will protect us in case our card is used by miscreants or anti-social elements.
This happened for a stolen mobile for one of my distant friends, but credit card is a financial vehicle and can be tracked, so better be careful than sorry.

The beginner should decrease the credit card limit to the comfort level. Pay the dues in time. In such case one can go for 2-3 cards. If any one card gets misplaced and misused the burden of repayment would not be much.

I have a salary account with HDFC and they automatically initiated proceedings to issue a credit card to me even though I didn’t ask for one at that time. Surprisingly, a few weeks later, they rejected the credit card application on their own as well without giving any explanation to me.

This all happened when I was working away from my home state. Now that I have transferred to my home state, HDFC is refusing to transfer the account to my local branch saying it is not possible!!! They are also refusing to give me a credit card now saying that my account history shows I have already been rejected a CC earlier even though I didn’t apply for one. All this BS is making my head spin.

This is not possible in today’s world, with strict regulations. You can talk to customer service with booming voice (lot of things get done using this Indian technique!), but Grievance cell should definitely address this. If at all they don’t, you can go to banking ombudsman. It will be definitely addressed. Hope it helps.

Hi, I have a HDFC titanium card which I subscribed to as the bank simply offered it to me. it’s been a year almost but I haven’t yet activated it. As I am young and live with my family my salary is enough to pay my shopping and dining expenses. The bank is now charging me annually on it for not spending the prescribed limit. Do I surrender the card or how else best can I use it. And importantly will this affect my CIBIL rating.

Never keep the card in non-usage mode; besides ID theft (which is rampant now-a-days even in India – there are wierd ways available for pro thieves to collect that information), what is the use of getting a card simply offered by salesmen? We cannot blame bank for pushing it down our throat.
If you have no use for it, best to close it!

ICICI already has tie-up with HP, so you should have cash back facility for taxes I think! So we can use debit card itself. As for HDFC, I am using platinum plus, which gives cash back and double reward points from BP. HDFC platinum/platinum plus is good, but approving is case-by-case and depends on several factors, also mentioned in the article – like having a prior transaction with HDFC; and also, levying annual charge is subjective and based on person and history. So, better calculate reward/annual charge and take one.

Hi Manish,
I currently hold 4 Credit Cards (StanC, HDFC and 2 CITI cards). Have been using StanC for more than 3.5 years, HDFC & Rewards CITI for almost 6 months and IndianOil CITI for 3 months.
IndianOil CITI was sold to me by Bank saying I’ve an excellent CIBIL score and it’s a good card so I can close RewardsCITI and have this.
I normally utilize a max. 15% of overall credit limit across all cards. And, till date I had 2 Late payments on HDFC card. Whereas, I had till date paid all outstandings on time for other cards.